While Basel III has already loomed large in
discussions of leasing’s place within the banking industry, the
regulation may change the fundamentals of the leasing business
model.
This is the conclusion of a whitepaper
recently published by asset finance software developer CHP
Consulting.
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The report, Basel III: The
implications for asset finance, looks at the direct impacts of
the regulation, such as the need for addition capital in order to
cover asset finance portfolios and additional liquidity
requirements.
However, the whitepaper also suggests these
requirements may lead to a change in business model for banks
engaging in asset finance as some may choose to amend their
business acceptance criteria to exclude certain types of agreement
or decide existing contracts no longer meet their
requirements.
The report also explains the major changes
required by the new global standard, its background, structure and
practical impact on asset finance businesses and their IT systems.
Furthermore, the report, which is available
from the CHP Consulting website, assesses the indirect impact
on asset finance businesses not directly regulated by Basel
III.
Andrew Denton, CHP Consulting’s chief
operations officer, said: “Under Basel III, banks will need to
operate from a more stable platform, and this will require major
changes to the way they do asset finance. In our paper we also
explain the knock-on effects on financiers not covered by Basel
III, and highlight the opportunities that can be seized by those
who are ready for the changes.
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By GlobalData“Delivering the best systems, implementation
projects and consultancy is about a deep engagement in all aspects
of our industry. That’s why we continue to conduct original
research and issue thought leadership papers like this; we want to
give our clients the knowledge and flexibility to adapt to change
when the time comes.”
In October 2011, CHP, the developer of ALFA
Systems, conducted an industry webinar entitled How Basel III
will affect the asset finance industry. The online debate
featured over 400 participants and was chaired by IAA Chairman
Derek Soper.
